Sirius Blinks in the Satellite-Radio Wars

Last week, Sirius and DaimlerChrysler (DCX Quote) announced -- or re-announced -- old plans to launch three channels of children's programming for TV monitors in the backseat of cars. That gave Sirius' stock a bit of a pop, but it will surely give back those gains with this news of lower subscriber expectations.

Earlier this week, New York's Cardinal Edward Egan appeared at Sirius headquarters to bless the studio from which the new Catholic Channel will broadcast. There are more than 60 million Catholics in the U.S., and it is hoped that this new channel will spur some Christmas buying.

Plus, Nascar fans will be joining Sirius after the first of the year. This joint promotion to another audience of 60 million is also hoped to spur holiday sales. It still might.

Judging from the letters I have received from many RealMoney readers, those who have satellite radios seem to love them. I am in that camp. It isn't just the issue of commercial-free radio.

For instance, if you live in a smaller community with only a handful of radio outlets, you are limited in your musical choices. Believe it or not, with dozens of radio stations and millions of listeners, New York City cannot support a single country-and-western station and has only one classical station. National Public Radio's WBGO is the only station in the New York metro area to offer jazz 24 hours a day. Both XM and Sirius offer multiple choices within each of these three genres.

The automobile companies have bought into satellite radio, and by 2010 or 2011, most cars will come off the assembly line with units built in. At today's penetration rates, only 6% of cars on the road will be so equipped this year.

The future seems rosy, even though the road to get there may be taking a bit longer to find on the map than most of us expected.